Public Accounts Committee on March 7th, 2024

[Catherine Poulin]

There is no pre-established threshold. Every allegation must be examined with a view to establishing its basis and determining whether there are facts to support it. Sometimes, when there is only one allegation, we will be able to confirm it with evidence.

For example, in the case of the other security clearance suspension that took place, we were informed that a supplier's chief executive had a job while he was the chief executive officer of the company. That involved a very quick verification. We had confirmation of dual employment. Because of other information in the file, we were automatically able to confirm that the chief executive was in non-compliance with the contract security program and we were able to suspend him very quickly.

With respect to GC Strategies, a number of allegations have been raised. The sum of the allegations that were proven resulted in the chief executive being found in non-compliance and having his security clearance suspended.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

A very significant issue that the Auditor General's report identifies is the terrible lack of documentation. As we all know, supporting documents were either not kept with the appropriate file or in some cases not kept at all.

PSPC expanded the new electronic procurement system last year. Can you tell us more about the system? Do you believe that had it been in use for this project, it would have addressed some of the concerns around document retention?

[Arianne Reza]

I want to start by saying that this is a recommendation that we also saw in OPO, the Office of the Procurement Ombud, in terms of the documentation on the PSPC side that we need to do better.

Dominic is going to talk to it in a moment, but I want to be unequivocal that this is about due diligence and ensuring that we have the right documents on file so that when the auditors come in, Parliament and Canadians can see that there's a clear thread in the decision-making.

We're really going to double down, going forward, on due diligence. You heard my colleague earlier talk about some of the measures we're taking to have greater price substantiation and cost control decisions and the functions that are being associated with the task authorizations meticulously recorded.

However, there is an additional wrap around that, which is the e-procurement system, taking what has traditionally been paper across the system and putting it into a procurement system that's online and digital, and that's going to give us a lot of different various elements, including security, audits and—

[Dominic Laporte]

It was launched in 2018, so—

[The Chair, Conservative, John Williamson]

I'm sorry, Mr. Laporte. We'll have to come back to this. The time is well over. I appreciate it, but there is time remaining for members to pick this up again. I'm sure they will.

We'll turn now to Ms. Kusie. You have the floor for five minutes, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair. I very much appreciate it.

Before I get into my questions, I just want to say to Canadians and to all the Liberal members on this committee that the ministers are inextricably implicated in overseeing these projects. That's what a minister is for: It's to oversee the spending of taxpayer dollars. It is their job to oversee all these things. It would be impossible not to implicate the ministers in these projects and in the outcomes that are received—or, in this case, not received—for Canadians. It is impossible to not implicate the ministers here. I want to make that absolutely clear.

To the Auditor General's team, you did a report on government benefits modernization and found that it was over budget by $3 billion. Is that correct?

[Andrew Hayes]

I don't remember the exact number, but we did find that it was over budget.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Would it be fair to say that this is the largest IT modernization project or program in Canadian history? Would that be an accurate comment?

[Andrew Hayes]

It is certainly a large one when you consider the fact that it's dealing with CPP, EI and other major benefit programs for Canadians.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Would it be fair to say, based on what we've seen with the creation of arrive scam, that this project is largely based on IT outsourcing?

[Andrew Hayes]

I think that's evident from the way the contracts have been running. We identified in the report that there was a heavy reliance on external contracts instead of the public service and that, over time, there should have been an analysis of how to move that work to the public service.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Then it would be fair to say that for this project, the largest project in the history of the Canadian government, the Canadian government is using outsourcers such as GC Strategies and others. Would that be a safe assumption in this case?

[Andrew Hayes]

Just to be clear on my last answer, I was referring to the ArriveCAN audit.

In terms of the benefits delivery modernization, as we heard from the chief information officer in December, it is important to rely on external contractors for some work. The real question is making sure that there is a rationale for using external contractors versus the public service and identifying when things should be done by the public service.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

But essentially the same process that was used for arrive scam is being used for this project, the largest IT project in Canadian governmental history. Would you say that's accurate?

[Andrew Hayes]

I don't think I'm in the best place to comment on that. I can perhaps turn it over to the deputy minister.

Before I do that, I would mention that the ArriveCAN application development happened in the context of the pandemic, when national security exceptions may have been available. I don't believe the situation is on the same basis as the benefits delivery modernization.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

That's fine, Mr. Hayes. I'll continue with my questioning.

Would you say it's possible, then, that the benefits modernization...? The report completed by your office saw a $3-billion overrun. We're not even talking $54 million or $60 million; it was a $3-billion overrun. It's safe to say that it could be as a result of the same model that arrive scam is being based upon. Would there be any truth to that statement at all? Would the possibility exist that what we see with arrive scam, a $60-million minimum, could be used for this largest project ever in the history of Canadian government in IT, which currently is at a $3-billion overrun? Is that possible?

[Andrew Hayes]

I'm having a difficult time making the connection between the two projects. I would say that some of our findings in the ArriveCAN audit would be important for the departments that are involved in benefits delivery modernization, including the importance of making sure that competitive procurement is used as much as possible and including the fact that documentation for decision-making should be clear and concise on the file.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I don't think it is difficult to make the connection, because we have this $60-million arrive scam application. I think it's very easy to apply it—

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I have a point of order, Chair—

[The Chair, Conservative, John Williamson]

Just one moment, Ms. Kusie—

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

—and I'm sure IT middlemen are salivating at the prospect of $3 billion in overruns.

[The Chair, Conservative, John Williamson]

Ms. Kusie, I have stopped the clock. I have a point of order. I will return the floor to you shortly.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

The witness has been answering the question. We've seen already from the Conservative members that when witnesses are answering questions clearly, they are recharacterizing and misquoting the officials.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

This isn't a point of order.